Oracle retains lead in database market

IBM and Microsoft still trailing, says IDC. The worldwide relational database management systems market saw a 12.6 percent growth spike in 2007 to $18.8bn compared to $16.7bn in 2006, according to IDC.

While new features and innovations helped drive up revenue, some of the market's overall growth is also attributable to fluctuations in currency exchange rates, noted the report's author, analyst Carl Olofson. The weak US dollar has help drive up software vendors' reported revenues outside the country.

Oracle once again took the top spot, capturing 44.3 percent of the market with revenue growth of 13.3 percent. IBM came in second with a 21 percent share, also logging a 13.3 percent revenue growth rate. It was followed by Microsoft, with 18.5 percent of the market and a 14 percent jump in revenue.

Sybase and Teradata rounded out the top five, garnering market shares of 3.5 percent and 3.3 percent, respectively.

Oracle's continued strength came from sales of database options, such as its Real Application Clusters offering, Olofson said. "Oracle Database 11g has experienced unusually high early adoption rates for a major release," he added.

The top five vendors take up more than 90 percent of the market, but "there is plenty of dynamism and growth potential" in the other 10 percent, Olofson wrote.

For example, the open-source database maker Ingres took just 0.1 percent of the market in 2007, but that represented a 206.6 percent growth rate, according to the report.

Author: Chris Kanaracus @ www.pcadvisor.co.uk

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Oracle shares down as outlook gives pause

Fourth-quarter results top expectations, but forecast disappoints. Shares of Oracle Corp. slipped in early trading Friday after the software giant reported a 27% increase in fourth-fiscal-quarter profit but issued a forecast that was at the low end of expectations.

Oracle's recent results beat Wall Street's estimates despite worries that a sluggish U.S. economy could crimp sales. The company said net income for the period ended May 30 rose to $2.04 billion, or 39 cents a share, from $1.6 billion, or 31 cents a share, in the year-earlier quarter.

Excluding special items, Oracle said net income for the quarter would have been 47 cents a share. Analysts were expecting earnings of 45 cents a share for the period, according to estimates from FactSet Research.

Revenue rose 24% to $7.24 billion. Wall Street had been expecting revenue of $6.85 billion. Oracle had previously projected revenue growth of 14% to 18%.

Shares of Oracle had run up nearly 20% in the past four months before the report. The stock slipped about 3% in early trading Thursday, moving down 65 cents to $21.90.
In a conference call late Wednesday, Oracle Chief Financial Officer Safra Catz said the company's strong sales should carry into its current quarter. But the company projected that earnings would come in between 24 and 27 cents a share for the period. Analysts were looking for 27 cents a share for the quarter.

"These numbers imply full-year license growth of 9%, which we believe is overly conservative even under adverse macroeconomic conditions given Oracle's ongoing market share gains in apps and middleware," Peter Goldmacher of Cowen & Co. wrote in a note to clients Thursday.

Tom Ernst of Deutsche Bank was less optimistic, writing that the company's strong fourth quarter was likely the result of heavy buying ahead of a planned price increase, which may have pulled sales out of the current period.
"While these tactical moves are consistent with Oracle's strategy to gain data center share in large enterprises, both bring business forward, are more likely to lead to shelfware and customer challenges, and potentially sacrifice longer-term growth," he wrote.

BEA's contribution

Oracle's most recent large acquisition was of so-called middleware provider BEA Systems Inc. in an $8.5 billion deal that closed in April. Middleware is used to connect disparate networks and programs.

While Catz said BEA delivered strong performance in the fourth quarter, she tempered expectations for the first quarter, saying BEA likely won't contribute more than $50 million to $60 million in new software-license revenue in the current period.
Oracle has expanded well beyond its roots as a database software provider by building up its middleware business and an applications software business to rival that of German goliath SAP AG.

Overall sales of new software licenses in the fourth quarter rose 27% over the year-ago quarter, Oracle said. The company had issued guidance for new license growth to be between 10% and 20% in the quarter. "We don't think our strategy is in any way running out of gas," Catz said. In a nine-inning baseball game, "I don't think we're even in the second inning at this point," she said. But while Oracle's fourth quarter is typically its strongest, its first quarter usually doesn't fare as well.

Catz said the company expects total revenue to grow between 18% and 20% in the first quarter from the total in the period a year earlier of $4.53 billion, while new software-license revenue should grow between 10% and 20%.

Author: John Letzing @ www.marketwatch.com

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Oracle Drops After Forecast Signals Slowing Growth

Oracle Corp., the world's second- largest software maker, dropped as much as 6.7 percent in European trading after a forecast for the current quarter signaled that growth may slow.

Excluding some costs, profit will be 26 cents to 27 cents a share, the Redwood City, California-based company said yesterday. Analysts had estimated 27 cents, according to a Bloomberg survey. Sales will rise between 18 percent and 20 percent, which would be the slowest growth since 2006.

Chief Executive Officer Larry Ellison, 63, enticed customers last quarter with products obtained in a $33.5 billion acquisition spree. International sales and a rebound in U.S. orders helped the company withstand a slowing economy. Oracle's forecast failed to assure investors that last quarter's surge will continue in the current period.

``What's the catalyst to own the shares for a while? There probably isn't one,'' Sarah Friar, a Goldman, Sachs & Co. analyst in San Francisco, said in an interview. ``The company is taking a more conservative stance, and I think it's the right thing to do right now.''

Oracle dropped as much as $1.51 to the equivalent of $21.04 in German trading from the close of $22.55 on the Nasdaq Stock Market yesterday. They traded at $21.48 as of 12:48 p.m. in Frankfurt. The U.S. shares are little changed this year.

Net income climbed 27 percent to $2.04 billion, or 39 cents a share, in the fourth quarter, Oracle said yesterday. Sales increased to $7.24 billion in the period, which ended May 31.

Topping IBM

For fiscal 2008, Oracle reported $22.6 billion in revenue, vaulting it past International Business Machines Corp. in total software sales for the first time. Microsoft Corp. ranks No. 1.

Excluding acquisition costs and some other expenses, profit rose to 47 cents a share last quarter, topping the average analyst estimate of 44 cents. Including acquired companies, sales advanced to $7.28 billion in the period. That compares with a $6.88 billion average estimate.

Oracle's growth forecast indicates first-quarter sales of $5.42 billion to $5.51 billion.

``We aren't seeing a marked slowdown, but it's extremely early in the quarter,'' President Safra Catz told analysts yesterday on a conference call. ``We won't see significant issues until much, much later if they are there.''

Oracle dominates the market for database programs. It also sells business-management applications for tracking sales, managing billing systems and handling accounting tasks, and provides so-called middleware, which helps different types of programs share information.

Americas Rebound

Sales in the Americas region, dominated by the U.S., climbed 18 percent last quarter. While those sales grew more slowly than overall revenue, they bounced back from a decline in the earlier quarter.

``To see high-teens growth out of the U.S. is a nice rebound from the previous quarter,'' Andy Miedler, an analyst with Edward Jones & Co., said in an interview from St. Louis. ``Longer term, we expect broad-based strength out of all geographies for Oracle.''

Author: Rochelle Garner @ www.bloomberg.com

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